NEW DELHI: Artificial intelligence (AI) is reshaping labour demand across Asia, with employer demand falling by nearly 10% in occupations more exposed to the technology since the launch of ChatGPT in November 2022, according to the International Monetary Fund’s (IMF) October 2026 Regional Economic Outlook: Asia and Pacific.The report, based on approximately 40 million online job postings across 19 Asian economies, highlights the challenges facing countries such as India, Indonesia and the Philippines as they seek to create productive jobs for growing working-age populations while AI transforms the sectors expected to absorb new workers.However, the decline in demand for workers in AI-exposed occupations appears to have stabilised, suggesting that the technology’s impact on employment is not limited to job displacement.AI creates demand for new skillsThe IMF report points to the emergence of new employment opportunities requiring specialised AI skills, including prompt engineering, retrieval-augmented generation and AI agent development.Employers are increasingly seeking workers who can integrate AI into business processes, improve productivity and translate technological capabilities into practical applications.Firm-level adoption of AI, however, remains uneven. Around 6% of firms in Asia explicitly seek AI skills in their job postings, the report said.Businesses adopting AI are experiencing stronger labour demand growth than those that have not adopted the technology, including in occupations highly exposed to automation. This suggests that AI can complement human capabilities even as it reduces demand for certain tasks.India faces jobs and skills challengeThe implications of AI differ across Asian economies. Emerging economies such as India may initially be less exposed to the technology because a large share of their workforce remains employed in agriculture and other sectors less affected by AI.However, this could pose a longer-term challenge if AI makes it harder for workers to transition into higher-productivity manufacturing and services, the report said.For countries with expanding working-age populations, the challenge is to generate enough productive employment while ensuring that workers have the skills required by an increasingly technology-driven economy.Education, reskilling key to managing AI disruption
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The report emphasises that the response to AI must go beyond encouraging technological adoption. Education reform, reskilling programmes, digital infrastructure and stronger labour-market institutions will be essential to prepare workers for changing occupational demands.Businesses will also need to invest in workforce development alongside AI adoption to help employees adapt to new roles and changing skill requirements.The report suggests that AI need not become a barrier to inclusive growth. With timely investments in skills and preparedness, Asian economies could use the technology to boost productivity, encourage innovation and support sustainable employment.
